market-regimes_skill

Overview

This skill detects prevailing market regimes and recommends regime-specific trading approaches to improve decision-making. It maps price action and volatility patterns to concise strategies such as reduce trading, long-only bias, short management, or active trend-following. Use it to select an appropriate tactical posture and adapt position sizing, frequency, and asset focus to current conditions.

How this skill works

The skill inspects recent price moves, cross-asset direction, and volatility to classify regimes (e.g., Trending Up, Moderate Bull, Moderate Bear, Mixed Choppy, Sideways Flat). For each detected regime it provides empirically derived tactical guidance: trade frequency, directional bias, risk limits, and asset selection. Recommendations include confidence scores and practical actions like reducing trade frequency, preferring longs, or enforcing risk validation rules.

When to use it

• Before allocating capital for a new trading session to set frequency and bias
• When market direction or volatility shifts and you need to adjust strategy
• To select asset targets within a multi-asset portfolio based on regime
• When validating whether technical signals should be trusted or ignored
• For post-trade analysis to evaluate whether performance aligned with regime guidance

Best practices

• Treat the regime output as one input alongside macro, fundamentals, and tape reading
• Enforce simple risk rules (e.g., per-position risk limit, fixed R:R) recommended for the regime
• Reduce trade frequency in choppy or sideways regimes; increase controlled participation in confirmed uptrends
• Prefer asset selection over blind signals—favor strongest movers in trending regimes
• Monitor for regime changes and adapt allocation quickly; avoid holding contrary positions against regime bias

Example use cases

• Switch to zero or very-low trading frequency during Mixed Choppy or Sideways Flat regimes to preserve capital
• Adopt long-only, validated trades with 2% risk and 2:1 R:R in Trending Up windows
• Favor short positions with active profit-taking during Moderate Bearish conditions, focusing on volatile decliners
• Increase trade cadence (120–200 trades/24h) with strict risk validation when a broad uptrend is confirmed
• Defer leveraged or mean-reversion plays in low-volatility or flat regimes where fee drag and false signals dominate